RE in a cheaper country, problem in returning back to mother country

[kcowan]

I guess I would say: What is the point of moving in the first place? If it is to retire before you were capable in the US, then you might have to make lots of compromises. But if you got 10-15 years of luxury living, what is the problem? Finally pay the price!

[Lancelot]

^ For me the lower cost of living abroad was a side benefit. My main reason for relocating was a love of travel and the expat experience. By nature I LBYM so moving back to the US is never a problem. Compared with Thailand cars, electronic devices and grain feed beef are all cheaper in the US.

[BunsGettingFirm]

Quote:

Originally Posted by landover A hypothetical situation, A person REed in a cheaper cost of living country. That person has enough money to live a quality life at the cheaper destination. Now something happened (Exchange rate turned worst, VISA, tax, health, etc.), that person is forced to return to original country. But now the challenges start, the money which was sufficient in the cheaper country, is not sufficient, (WR is much north of 4%). Most skills are outdated so getting a good paying job is difficult. Some may find difficult to get health insurance. Leaving family behind in some cases. So how to prepare for this situation, should have enough to RE in your original country only then retire in a cheaper country and live like king?

I am assuming you have sufficiently planned monthly cash flow and capital preservation and appreciation to retire in an OK but not spectacular style in the U.S. but you are only using the lower cost to upgrade your lifestyle, then let's take each of the reason you listed to see if returning to the U.S. makes sense.

If the exchange rate turned worse, then how does returning to the U.S. help? If you find life already a hard scrabble in a super cheap place like SE Asia where a bowl of pho can be had for $1.50, then how does returning to the land of $7.26 McDonald's meals help?

Tax? What do you mean? It's one word. What kind of tax would cause a person to have to return to the U.S.?

Health? Does this mean a health condition that can only be helped by living in the U.S., or does this mean that one can only afford to get quality health care in the States? One, I am not personally familiar with a particular condition that can only be ameliorated by living in the U.S. Two, I thought the Kiderlis have put plenty of info on their site about the quality and affordability of medical care available outside of the U.S. to obviate the need to ask this kind of question.

The only reason that seems plausible is if the country of your first choice drastically changes visa requirements. Then I assume you can always fall back on the countries of your second and third choice. Not ideal, but I don't see it coming down to the false dichotomy of retiring overseas or returning with tail between one's legs to the U.S.

[arebelspy]

I'm guessing tax means taxes. Meaning taxes in that other country raise enough that you can't afford to live there any more. That only makes sense if the tax is so high it costs more to live there than in the US.

And exchange rate worsening is possible, but it'd have to get so worse as to the cost of living being more in that other country than in the US.

Both implausible, but not impossible.

[ItDontMeanAThing]

Quote:

Originally Posted by landover Quote: Originally Posted by Texas Proud A strange question in a way.... Let's change it to.... the market crashes over a 10 year period and you can see the writing on the wall that your portfolio will not make it... But, to answer your question..... move to a different cheap country... I guess this is strange since I am not sure how better to put this. Market crash (or meteor strike...) is something which is always a non zero probability. I guess by this logic one should work till not physically able to continue. I guess if one has 10-15 yrs of good retirement at relatively early age what else one can want.

I don't think it's a strange question. To me you were asking one of two things, maybe both: 1) what additional threats to running low on money come from being an expat, and 2) what are those threats. Both are meaningful questions IMHO.

[Ed_The_Gypsy]

These are serious questions. They have been discussed in forums on living in Mexico from time to time.

People may have to return home to the Fatherland due to a health crisis that cannot be dealt with locally or family reasons.

The biggest problem seems to be re-entering the housing market once one has sold the house in the US. I am thinking that these are people who sold the house and moved south to live on SS and have little else. That may not be a big problem for several years.

If you do have private assets, a 3.5% withdrawal rate can result in a very large pot in later years, with good judgement, most of the time. Look at Firecalc's results. All those colored lines above the bottom locus represent the growth of the unspent balance of the pot.

I used Firecalc recently with updated assumptions. It looked good. Given the amount it said I could take with 100% success, subtracting the fixed income of SS and tiny pensions, the SWR came out to 3.5% of the invested pot (100% equities). Hardly a surprise.

Still, it is a gamble. We will have the same assets no matter where we live. Even if we live for a time in a cheaper country, we will have the opportunity to improve our situation by spending less and taking a smaller withdrawal rate or deferring withdrawal altogether for a while.

Since I am still working (in a 3rd-world country with delusions of grandeur--them, not me), we have not been forced to make a decision yet.

By the way, our internet was out again for a day. 3WC again.

[Hobo]

I moved to Indonesia 10 years ago on a well-planned ER scheme. It seems that in a foreign country it is much easier to be flexible about "what if something bad happens" scenarios. Lots of other people live here on a far less income than I have. A house and quarter acre of land is cheap at about $125,000. Or rent the same for $300/month. Doctors and decent health care is available very cheap. I drive a motor scooter to get around locally or rent a driver and car for about $35 per day. No car insurance, no driver's license, NO CAR EXPENSE. And local transportation (from buses, to trains, to horse carts) are alternative transportation options. Handymen/carpenters @ $6 per day. Live-in, full time maid @ $50/ month. I could easily cut back...or splurge even more, depending on the circumstances. Anyone up for a week in Hong Kong? Asian Airlines are so cheap.

Plus, I moved to an area off the beaten tourist trail, but now it is getting popular. As a result the value of the several pieces of property have increased 1000%. Dumb luck, but a lot of third world countries offer a lot better growth potential in many different sectors. If you have spare cash, and become familiar with the country you live in, you become much more comfortable in investing locally. I don't count on it, but a smart investment locally dumped an extra $200,000 in my bank @ 5% capital gains tax. So their is both risk and opportunity.

And I really enjoy living in a new culture. American opportunity is great for the young and middle age people. But warm weather, beach, and friendly people with different customs really makes life interesting in my old age.

[haha]

Quote:

Originally Posted by Hobo But warm weather, beach, and friendly people with different customs really makes life interesting in my old age.

I bet you are right about this!

Ha

[Birchwood]

I immigrated to America about 35 yrs ago, armed with a doctoral degree which allowed me to enter a US univ. as a post doctoral fellow. That lead for me to have a small piece of the American dream-- i.e. a middle class existence. Thanks to Amerca for that. As the years passed I found myself
Americanized and farther away from my roots. When I visited the old country after 25 yrs, things have changed. I cannot adapt to the old ways and mores. My wife and kids are all American.

Although it may be cheaper to live in the old country, it will be impossible for me to go back.

[obgyn65]

Thank you for sharing, Hobo. I also enjoy living in new cultures, and this may be one of the reasons why I go to Central America so often. I intend to spend more time there as I retire. Enjoy your time in Asia.

Quote:

Originally Posted by Hobo And I really enjoy living in a new culture. American opportunity is great for the young and middle age people. But warm weather, beach, and friendly people with different customs really makes life interesting in my old age.

[Nodak]

Quote:

Originally Posted by skyvue If you run out of money and need to go back to work with rusty professional skills, move to North Dakota! I read an article recently that said they have 3% unemployment and are needing to pay $12-15 dollar per hour just to staff jobs like McDonalds. The oil and natural gas industry is booming in that area and pay $30+ dollars per hour for basic labor jobs in the oil fields. Many of the skilled jobs are paying much more. After reading this I wonder why so many people are suffering with their families in poverty in metro areas like Detroit, Cleveland, etc.. when all they need to do is move to get a good job (or at least a job good enough to pay for their basic needs)? Perhaps if our social programs weren't constantly extending benefits, it would force some folks to make these type moves.

I've lived in ND for 56 of my 64 years and we are doing very well here. It's not just the oil and gas industries, farm prices are way up and wind energy is also growing. Our problem is climate, not many people want to live where winter temps can exceed 25 below zero and winter can last for 5 months. The other problem is housing. There is a shortage of decent housing in areas where the population growth has been stagnant for 40 years or more.

[DangerMouse]

Quote:

Originally Posted by Birchwood Although it may be cheaper to live in the old country, it will be impossible for me to go back.

We find the same, we have been expats for 22/25 years and every time we go back to Australia we find it more alien. Australia has changed and so have we, both going in different directions.

[kcowan]

Quote:

Originally Posted by DangerMouse we find it more alien

I think it is because you have changed. All countries evolve but I think people evolve faster.

[fh2000]

My wife and I came to the US from Asia about 27 years ago. We still have families back there and we visit them once every couple of years. The country is in a more developed part of Asia so the savings on the living cost is not as great as other part of Asia, but the low cost of universal healthcare system is the biggest reason that we plan to go back for our early retirement years at least.

My wife calculated the cost for 6 month in US/6 month there, as opposed to all of the 12 months in US. There are not much savings since we will still need to keep our house, pay into health premium, car insurance in US etc.. We won't be able to stay there full time until our children are independent which will be few more years.